Myrtle Beach area foreclosure rates still in top 10, but falling faster than other SC areas

sjones@thesunnews.comJanuary 16, 2014 

Horry County finished 2013 with the sixth highest foreclosure rate in the state, which had the eighth highest rate in the nation -- statistics that local and state real estate officials find hard to explain.

Foreclosures have tapered off noticeably in Horry County and much of the rest of the state in the last year, and a considerable decline in the number of distressed properties for sale has led to modest price increases for homes and condos in the local market, at least. But the decline in much of the rest of the nation has been even faster, apparently, as South Carolina climbed to eighth in 2013 from ninth in 2012, according to a year-end report from RealtyTrac, which tallies foreclosures nationwide.

“I know that our market is kind of letting the water out of the bathtub,” said Todd Woodard, president of SiteTech Systems, which tracks the area’s real estate market. “(Foreclosures) keep going down.”

Indeed, RealtyTrac said that Horry’s 2,977 foreclosure filings in 2013 were down 27.34 percent from 2012, the steepest drop among the state’s five most populous counties.

Woodard said the foreclosure numbers his company collects are different from those RealtyTrac uses, but like RealtyTrac, they show a downward trend.

SiteTech’s information shows there were 1,682 properties entering foreclosure in 2013, about a 40 percent drop from 2012. RealtyTrac’s numbers include default notices, scheduled auctions and bank repossessions, which potentially could produce two filings on the same property, Woodard said.

But the differences in the way the numbers are collected don’t change the RealtyTrac numbers as it uses the same formula for all counties and states as it uses for Horry and South Carolina.

A deeper look at the RealtyTrac statistics also shows that in 2009, Horry County foreclosures jumped 317.53 percent from 2008, by far the highest jump among the top counties.

Nick Kremydas, CEO of SC Realtors, the state association, said that the counties that grew fastest just prior to the 2007 stock market crash suffered the highest foreclosure rates afterward and still remain among the highest.

RealtyTrac’s statistics rank suburban Charleston counties of Dorchester and Berkeley as one and two in the 2013 foreclosure rate, followed by Beaufort. York and Richland are numbers four and five.

Kremydas said that South Carolina’s continued rank as among the states with the highest foreclosure rates may be at least partly because foreclosures in S.C. must go through the courts as opposed to other states where the process can be handled administratively.

The court route tends to increase the time between a foreclosure filing and the time that the property is sold, meaning that more properties will be in the pipeline longer than other states. Additionally, a 2005 Supreme Court order from Chief Justice Jean Toal required specific steps lenders and borrowers had to take to give the greatest chance that loan modifications or other mitigation could happen to forestall foreclosures. The additional steps added more time to the process.

Kremydas said that all South Carolina counties don’t follow foreclosures like Horry does, but the reports he’s hearing are that the numbers are down throughout the state. The fact that the rankings remain high, he said, point to the state of the recovery.

“The economic recovery is still fragile,” he said.

Laura Crowther, CEO of the Coastal Carolinas Association of Realtors, said Horry’s high ranking could be at least partly because there are a relatively large number of housing units in Horry as compared with other large counties. According to RealtyTrac’s numbers, only Greenville County has more housing units than Horry, 193,000 versus 183,000.

Crowther noted that distressed property sales declined sharply in Horry County in 2013, down about 36 percent for single-family homes and 45 percent for condominiums, which suggests that foreclosed properties are a smaller and smaller part of the market.

In addition, noted Woodard, the median price for both condominiums and single-family homes began a modest climb last year, another indicator of fewer foreclosures and short sales on the market.

Jenna Johnson, spokeswoman for SCHelp, an organization that among other things works with homeowners to avoid foreclosure, said that foreclosures seemed to decline suddenly in late summer/early fall, although she wasn’t sure why.

In fact, she said that the agency has more clients now for homebuyer help classes than it does for foreclosure assistance.

“There’s a lot more jobs,” she said, meaning there are more people who can potentially buy a house.

She noted that Berkeley County, for instance, saw a blossoming of new businesses and employment in the last year. In 2012, the unemployment rate fell statewide and in Horry County where it stood at 7.8 percent in November, a 1.9 point drop from a year earlier.

South Carolina’s and Horry County’s drop in foreclosure filings are part of a nationwide trend, according to RealtyTrac.

The foreclosure inventory is down 22 percent nationwide over the past year, a 44 percent drop from the foreclosure peak of 2.2 million in 2010. But while rates were down in 37 states for the whole year, 25 states saw increased rates in December. Maryland led that list with a jump of 107 percent in foreclosures during 2013.

In South Carolina, Kremydas said, “The basic metrics have improved (in the last two years).”

He surmised that RealtyTrac’s numbers were an indicator of where the state and Horry County have been rather than where they are going.

Contact STEVE JONES at 444-1765.

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